Chris in Bitcoin & Cryptocurrency published on 10, March 2016Bitcoin has been making big waves in the financial world recently. Banks and countries are struggling to keep up, both in terms of regulations and of providing competition. Bitcoin’s main features are that it is a true digital currency, based on a blockchain network that verifies all transactions constantly. This has made it ideal for online transactions, which are becoming an important part of the financial world.
People are paying attention to this and a lot of them are encouraged by the cryptocurrencies’ growth to try their hand at investing in it. There are several options available.
Current investment options
Bitcoin investments can be done today by either investing directly into businesses that deal in Bitcoin or by using the two main trading options: forex and binary options. There are quite a few businesses that can give a good return for an investor’s money. One of these is investing in mining. Potential miners will have to buy mining hardware and maintain them as they process the transactions. With a potential reward of 25 BTC, with each bitcoin valued at just above $400, this should be an attractive investment.
For those who want to opt for pure trading, Bitcoin forex and binary options are available. With the volatility of Bitcoin, forex traders can find themselves on a roller-coaster ride. For instance, in the past two weeks alone, Bitcoin value went from a $440 high to a $380 low and is once again climbing to a $400+ price point. This can mean big profits or losses for those involved. Bitcoin binary options suffer from the same unpredictability as daily fluctuations make predicting the price movement difficult.
With the potential gains and risks, people will have to keep the following in mind when investing in Bitcoin:
- Bitcoin is new
Bitcoin is probably the youngest currency out there. Released only in 2009, the cryptocurrency is still showing growing pains that most established currencies have skipped over. One of these difficulties is the problem with regulation and recognition. Banks know what to do with dollars or euros, mostly because they are backed by governments. Without any government backing, Bitcoin can sometimes be not accepted. Investors should check whether it is accepted in their country before investing.
Another part of its growth is Bitcoin price volatility . Most currencies have a set level where they bounce up and down in the market. Bitcoin has not found that yet. Investors should protect themselves from sudden drops and increases by taking it into account in their calculations.
- Borders matter
Bitcoin may cross borders easily, but they still matter. Different countries treat Bitcoin in different ways. For instance, Russia has taken a decidedly anti-Bitcoin stance, while some countries welcome it with open arms. Investors should familiarize themselves with the rules of the country they will be trading in. Additionally, keeping updated with these regulations should be a top priority.
- Research is key
The main factor that will contribute to Bitcoin investment success is research. Bitcoin is still young and it presents a lot of opportunities to savvy investors. Their aim should be to understand the market and to make investments that will make customers sit up and pay attention. Furthermore, Bitcoin is just the tip of the iceberg. The blockchain technology behind it has many people interested and can be a more potent source of investments.